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Thursday, Dec 12, 2019

SC to hear Tata's plea against Kazakstan company

The apex court continues a stay on commencement of arbitration proceedings to resolve a contractual dispute between Tata Steel and OJSC Ispat Karmet.

business Updated: May 11, 2008 17:24 IST


The Supreme Court has continued a stay on commencement of arbitration proceedings to resolve a contractual dispute between Tata Steel and Kazakstan-based OJSC Ispat Karmet (now Mittal Steel Temirtau).

A bench headed by Justice AK Mathur will take up the matter for final hearing after vacations in July.

Tata Steel had challenged the arbitrator's appointment by the Calcutta High Court on the ground that there was no arbitrable dispute.

According to the petition, Calcutta company Lindsay Internatinal had entered into a contract with Kazakstan-based OJSC Ispat in 2003 for supply of machinery.

While Lindsay contracted with Tata for supply and commissioning of the machines, the latter entrusted the work of maufacturing and supply of machines to one Indore-based ITL Industries on back-to-back contract basis.

Lindsay and Ispat, which was the end user, were also directly corresponding with ITL Industries for repair and replacement work. Ispat had discarded the faulty equipment and requested ITL and Tata Steel to take them back.

While Tatas had asked Lindsay to rectify the defects, the latter had claimed losses to the tune of 648,072 dollars (Rs 2.98 crore) and requested Tatas to remit the money so as to settle Ispat's claim.

The dispute related to a contract by and between Ispat and Lindsay and not against Tata, the petition stated, adding that "there was no privity of contract between Tata and ITL... There is no arbitrable dispute between the parties, if any, it is between Ispat and ITL Industries."

Besides, it said: "Ispat to whom the machine was supplied has used the same for more than the warranty period and dispute cannot be arbitrated upon as the same is outside the scope of the agreement."